hi all, i have just very recently got into online marketing, i am still updating my site so havnt marketed it yet or made any money. but when i do make money i want all my tax affairs to be all up to date and above board. i have joined the following affiliates: ebay partner network affiliate window affiliate future commission junction amazon when it comes to filing my tax return,is it just a case of printing out my statements from these 5 affiliates and also my bank statements and giving them to my accountant? also i wanted to ask, is it advisable to open a seperate business account for all money made from IM? any opinions/suggestions welcome thank you alan
If you're going to use an accoutant, you should talk to him/her now to understand if you need to pay estimated taxes. The IRS says: To answer your specific question, yes you can print those out at the beginning of next year, assuming each of those affiliates allows you to pull a year's worth of history. You don't have to have a separate business account, but it helps your record keeping. You also need to keep a record of any expenses you incur, i.e. paypal fees, advertising fees, etc. This will help offset your income so you don't owe so much tax. Personally, I keep monthly records of income and expenses so I'm not scrambling on April 14 trying to get everything together. If you do it this way, your accoutant will love you forever. This is assuming you live in the U.S.
the long and short of it is, if you are going to be getting a 1099 from the affiliate/ad network, you will have to declare it, because they will be declaring that they've paid you.
I've been doing taxes for 20 years and I can tell you the best thing to do is to visit your accountant now. He/she will tell you what to do now so that you have all the records you will need at tax time. Yes you need to report all your income (even if you did not get a 1099), and you will want to deduct all legit expenses.